If, for example, we imagine that the capitalists have a 'pull' over their labourers, inasmuch as they own the instruments of production, Professor Marshall will reply; - Not at all, for men can be substituted for machines or horses if the profits of any one capitalist get unduly high over those of another, and thereby the competition between the men and the horses or machines will ensure that neither capitalists nor wage-earners, neither profits nor wages, can get any advantage over the other, and that each will get precisely what each earns, under any circumstances whatever. This is what he calls Von Thunen's great 'law of substitution,' and is a most comforting doctrine for the Rockfellers and Astors of the world, inasmuch as it gives them the assurance that however colossal their fortunes may be, they at least have earned them; and however much appearance the labourer may have of being 'sweated,' what he is paid is really all that he has earned. Now of this demoralizing doctrine we may say at once that it may be true enough that the men cannot exploit their masters, inasmuch as if they attempted it, the masters, taking advantage of this 'law of substitution,' would use machinery instead; but why the masters should not exploit the men, when they have it in their power to cut them off in detail from all access to the instruments of production (above the range of a pickaxe, a spade, or a wheelbarrow) by which alone they can live, is a mystery which Professor Marshall does not think it necessary to explain.

Besides, how does he imagine that men can replace machinery, and vice versa, when in ninety-nine cases out of a hundred the work of the men and of the machines is not interchangeable? Does he imagine that because fifty navvies, say, can do the work of a crane in lifting weights, and so can replace the crane if the capitalist demands too much profit for the use of it, that therefore any number of men whatever can replace a locomotive under similar circumstances? They might, it is true, succeed in hauling the train, but where are they to get the speed? Or again, how can any number of men do the work of a ship, or of the mathematical instruments which direct its course? And if not, how can the work of capital and labour be reduced to a common denominator for purposes of comparison, - unless, indeed, it be those forms of capital which scarcely rise in complexity above the work of a navvy or hod-man? As well expect the worker with his hands, by some hocus-pocus of this 'law of substitution,' to be put in competition with the worker with his brains.

But if not, how are you going to prevent the monopolists of brains - the inventors and entrepreneurs between them - from exploiting the competing hordes of workmen who can neither invent the machines nor do without them? And yet this is what the 'law of substitution' has brought Professor Marshall to, by his method of skimming off the great dynamic forces of the science at the start, under the phrase 'other things being equal,' and thinking that by whipping up the skim-milk he is likely to get the cream! And it all comes from the attempt of the academical economists, by their statical method of the minutely divided stick with its successive units or increments, to arrive at those 'margins of indifference' as they are called where all things being alike interchangeable, they form 'substitutes' for each other.

And this brings us to the academical solution of the problem of Rent, which, by its 'margin of cultivation,' started this marginal method which has had so disastrous an effect on the Science. But to see the fallacies into which the academical economists have fallen on this important subject, it is necessary at the outset to get it into proper focus. And to begin with we may say that in this problem of Rent, the central figure is not the landlord, but the capitalist - whether he be a farmer a manufacturer, or a merchant, - for it is he who starting from the existing market-price of his product, whatever it may be, has to organise and determine on the basis of that price, what amounts of land, labour, and capital, at their existing prices, he can use to make his business pay. And the second point we have to observe is that the way in which he will act in regard to the land, the labour, and the machinery he will employ, will depend on whether it is a merely local market, a national market, or the world-market that he is about to supply; just as in an athletic competition the entries will be different for a local, a national, or an international competition; many of those who would enter for a local one being deterred by a national one, and of those for a national, by an international one.

And hence it is that there are as many kinds of rents as there are classes of markets to be served; certain lands available for the local market not being available for a national or an international one, owing to want of transport, or what not. And the consequence of this, again, is that everywhere land of the same intrinsic quality or productivity is put to all kinds of uses, - local, national, and international, - by the capitalists of all kinds who want to use it for their respective purposes; - whether it be farmers who have to decide whether they shall use it for wheat, or oats, or hay, or hops, or stock-raising, or dairy-produce, etc.; or manufacturers and builders, for factories, or warehouses, or dwelling-houses; or peasants, for market-gardening, and so on. If, then, we ask what are the considerations that we must bear in mind in attempting to solve the question of whether Rent enters into Price or not, they may be reduced, practically, to the following; - first, that the market price of the product is fixed for the capitalist by causes beyond his control, before he starts his undertaking; secondly, that this price has been determined as much by the demand for the product in the particular market for which he is catering, i.e. by its consumption, as by the supply, or the difficulties and costs incident to its production; thirdly, that all the products that are brought to any market are the result of the union in a single complex whole of land, machinery or implements of some kind, and labour; and that to place the product on the market at the least cost, these must be mixed in certain definite proportions, which depend on the nature of the land available and its existing rent, the price to be paid for the machinery or implements used, and the state of the labour-market at the particular time and place; fourthly, that there is no one of these instruments of production, - neither land, nor machinery, nor labour, - but has exchange-value in general, that is to say, that no one of them is like water, air, sunshine, and rain, for example, which are all alike without exchange-value in general; and that therefore there is no part of them - no particular piece of land in use, no particular machine in use, and no particular labourer employed, - but has economic exchange-value; and further, that if there be such a piece of land, or machine, or labourer, in actual employment, it or he is not in economic use, inasmuch as they have no existence in the mind of the master-capitalist who is organising his instruments of production for the purpose of putting the product on the market.